Study to Probe Impact of Health Spending on Asia

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is to carry out a new study into how private spending on maternal, newborn and child health care is hurting the poor in the Asia and the Pacific region.

The study is funded by an ADB technical assistance grant of US$300,000 with cofinancing of $326,000 from the Australian government through its Agency for International Development (AusAID).

In much of Asia, public funding of health care is low, forcing most households to pay essential health care bills out of their own pockets. These payments hit the poor particularly hard.

A 2006 study of 11 countries in the region estimated that as many as 78 million people dropped, or stayed below, a $1 a day poverty line because of health payments.

Maternal and child-related health care costs can be a particular cause of financial distress for the poor. These costs are often large compared to a family's income, are often sudden and unexpected, and occur with greater frequency because the poor tend to have more children and those children often suffer from poor health.

"Even a relatively small payment can mean either a financial barrier to essential care or a financial catastrophe to a poor person or household, forcing them to go into debt, or else reduce spending on such basics as food, shelter, or their children's education," said Ian Anderson, Advisor with ADB's Regional and Sustainable Development Department. "The poor usually face worse health situations than the rich to begin with. Paying out of pocket for essential health care further penalizes the poor, and increases the equity gap."

The ADB study will build on the findings of previous research and provide clear policy direction for government action.

"Better data and insights would help developing member countries and their development partners to identify the scale and intensity of the problem, possible policy responses and the likely budgetary implications for improving equity and access to essential health care for poor women and their children," said Mr. Anderson.

The study will carry out an analysis of the link between out-of-pocket medical spending and maternal, newborn and child health. The study will initially cover a wide range of countries in the Asia and Pacific region and then, based on the availability and quality of data, focus in on a smaller, yet to be decided, group of countries.

The study aims to answer key questions such as how many households are making health care payments that reach or exceed 40% of their total household spending capacity in a year, and what would it cost governments to prevent households from being pushed into extreme poverty by health spending.

Representatives of developing member countries and research institutions, academics, and members of the Maternal, Newborn and Child Health Network for Asia and the Pacific will attend a workshop later this year to review the findings, with a final report to be presented to ADB and AusAID envisaged for December 2009.

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